According to the financial times, EY is forcing their employees in the uk take leave for the last week of May.
They are telling employees to take leave starting May 26 going until May 29. EY already cut jobs in November of last year in their advisory practice due to a downturn in revenue.
The article stated that advisory counts for 70-85% of their revenues.This is obviously not true otherwise you would see advisory being a bigger piece of all the big 4 accounting firms revenue. Advisory is growing but it isn’t 100% of the accounting firms revenue. That’s just not the nature of their business. So much of their base work is regulatory mandated work like audits and tax returns. Without this work, the accounting firms would be in a way worse position right now.
Ey already cut partner pay by 20%.
According to UK leadership, EY is doing everything possible to prevent furloughs, layoffs and salary cuts.
Employees are also encouraged to take 70% of their annual leave by August.
This is just another measure by the accounting firms to prevent layoffs. This is good if they could predict the economy stabilizing into the future. However, I don’t think this is possible. A ton of jobs have been lost. Business owners aren’t going to feel comfortable hiring those employees back. Wages will be reduced. People will spend less money. That will mean less revenues all the way around. Some businesses will go out of business. Others will spend less money on consulting.
There are just too many bad things coming to say that the big 4 won’t lay people off. Once all those things happen and we establish a baseline in the economy, then the big 4 accounting firms will be able to guarantee jobs. Until that happens, I don’t see how the big 4 can say they won’t lay employees off or reduce their pay by additional amounts.